Internal control over safeguarding of assets may include controls relating to:

Question

Quizplus · Accepted Answer

Choice "A" is correct. Yes - Yes - No. Internal control over safeguarding of assets may relate to both financial reporting and operations objectives. For example, controls related to financial reporting might include: 1. Use of a lockbox system for collecting cash, or 2. Passwords for limiting access to accounts receivable data files. Controls related to operations might include controls to prevent the excess use of materials in production. Internal control over safeguarding of assets generally would not relate to compliance objectives. (Note that the auditor generally would only be concerned with the controls relevant to financial reporting, but this question does not ask which controls are important to the auditor.) Choices "B", "C", and "D" are incorrect, based on the above explanation.

Internal Control Over Safeguarding of Assets May Include Controls Relating